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Rolling funds into next purchase, what cost basis?
A hypothetical to see how people factor costs when rolling equity forward into additional purchases.
For this example assume you purchased property “A” for 100k, and put 25% down. 2 years later you sell it for 125k so you now have 50k (25k from your initial down payment + 25k in equity).
For your next purchase, would you factor your financials based on your initial 25k investment, or the full 50k you now have in pocket? If you subsequently purchased a property for 200k, would you count gains/losses against the 50k you now put in or against the 25k you started with as that’s what you’re actually out of pocket, depending on how you look at it.
I hope I worded that clearly